Guidelines For Students To Submit The Final Assignment

Guidelines For Students To Submit The Assignment1 The Final Asse

Guidelines for Students to Submit the Assignment: 1) The final assessment for semester 2, will be done through comprehensive assignment for a maximum of 50 marks. The schedule of the final assessment is available in the college website 2) All the students are expected to have only one assignment at one time. In case, if the students have more than one assignment on the same day, please report to the exam committee through the following mail id. as soon as possible. 3) All students are given 48 hours to complete and submit each assignment from the day, date and time the assignment is uploaded. Students are advised not to wait till the last moment of the deadline to submit the assignment.

4) The students can check the assignment anytime and any number of times from the opening of the assignment. The answer to the assignment need to be uploaded in e-learning within 48 hours. 5) The answer to the assignment can be uploaded only one time. No requests for resubmission of the assignment will be entertained. 6) The students may contact the following mail Ids if they face any difficulties while related to final assignment. 7) Students may contact their respective lecturer through college email (within the 48-hour period given) if they have any doubts and clarifications on the assignments.

8) Students should be aware that this assignment is an independent assessment. Students are not allowed to get help from any other person during the assessment period. 9) Students assignment will be checked for plagiarism through Turnitin software. This assignment will be assessed as per the College Assessment Policy. Student will be investigated in case of plagiarism as per the College policy and procedures. The maximum acceptable similarity index is 25%. 10) In case the students face any technical issues regarding the submission of assignment, the answer to the assignment can be mailed to the concerned lecturer within the 48-hour period using college email. 11) Any assignment submitted after the 48-hour period will not be considered for evaluation. 12) The assignment should be submitted only with the file in MS Word document. No other format is acceptable at all (e.g. pictures, JPEG, PDF, etc).

13) The students need to answer the assignment in the prescribed number of words as mentioned in the assignment. 14) The students need to follow the following format while preparing the assignment: Font Style: Times New Roman Font Size: 12 point for body and 14 point for Headings Line Spacing: 1.5 Margin: 2.54cm (One inch) on all the sides Colour: All words should be in black colour 15) Students who will fail to submit their assignment as per the deadline given are required to make an online appeal along with the valid excuses as the guidelines which will be announced through the college website or e-learning portal within three days from the date of submission deadline.

Paper For Above instruction

Evaluate the case studies provided, focusing on key financial management concepts and strategies. Analyze each scenario thoroughly, applying theoretical principles to practical situations, and formulate comprehensive reports addressing the specific tasks assigned. Ensure your responses demonstrate critical thinking, appropriate use of financial ratios, valuation methods, funding strategies, and decision-making processes relevant to each case. Incorporate credible scholarly references to substantiate your analysis, illustrating a strong understanding of financial management practices in various organizational contexts.

Analysis and Response to Case Studies

Case Study 1: Mr. Ahmed's Functions and Roles as a Finance Manager

Mr. Ahmed, as a finance manager at Muscat Investment Company, initially performed primary functions such as financial analysis, monitoring cash flows, responding to shareholder inquiries, and comparing financial statements to assess the company’s performance. These core responsibilities align with typical managerial finance tasks focused on maintaining financial health, transparency, and stakeholder communication. Additionally, he was involved in evaluating creditworthiness and advising on currency collection strategies, which expands his role into credit management and international finance.

Emerging roles assigned to Mr. Ahmed include strategic evaluation of investment options, notably leasing machinery, and financial planning for future growth. His involvement in assessing a new investment opportunity demonstrates a shift toward strategic decision-making, requiring a broader understanding of asset valuation, leasing economics, and risk analysis. The recognition and promotion signify his role evolving into a strategic partner who influences high-level financial decisions.

To further play emerging roles effectively, Mr. Ahmed should acquire advanced skills such as financial modeling, risk management, international finance, and strategic planning. Developing expertise in financial information systems and corporate valuation techniques will enable him to contribute to large-scale strategic decisions, helping the company navigate complex financial environments, especially given its international dealings and investment considerations.

Case Study 2: Capital Market Approach and Short-term Financing

The company is approaching the equity market to issue OMR 10 million worth of shares. This indicates targeting the primary segment of the capital market, specifically the equity or stock market. In Oman, the Oman Financial Market (MSM) facilitates such offerings, providing a platform for public equity issuance (Al-Tamimi & Ewi, 2017). This approach allows the company to raise substantial long-term capital to fund diversification and expansion plans.

For short-term finance, the market that provides this type of funding is the Money Market. The most suitable financial instruments for raising short-term finance include commercial papers, bank overdrafts, or short-term loans (Muttakin & Akhtar, 2017). Given the company’s immediate need for OM 2 million, a bank overdraft or a short-term bank loan would be appropriate, offering flexibility and quick access with manageable repayment terms.

Financial intermediaries in Oman that can provide short-term financing include commercial banks, Islamic banks, finance companies, and specialized credit institutions such as Oman Development Bank and Oman Housing Bank. These intermediaries play a vital role in providing liquidity and working capital support to manufacturing firms seeking to expand (Khan et al., 2018).

Case Study 3: Financial Ratios and Performance Evaluation

Using the provided income statement and balance sheet for Sweet of Oman SAOG, liquidity ratios like the current ratio and quick ratio, leverage ratios such as debt-equity ratio and debt ratio, and profitability ratios like net profit margin and return on assets should be calculated for 2018 and 2019. These metrics help assess the firm’s liquidity position, financial leverage, and profitability trends over the two years.

Comparison reveals improvements or deteriorations in financial health—e.g., an increased current ratio indicates better liquidity management, while a high debt-equity ratio might suggest increased financial risk. Analyzing the profitability ratios shows whether the company has become more efficient or experienced declining profitability.

For instance, an increase in net profit margin from 2018 to 2019 would suggest improved cost control or sales efficiency, whereas a rising debt-to-equity ratio might indicate reliance on debt financing, increasing financial risk. Overall, these ratios provide insights into operational and financial stability, guiding strategic decisions.

Case Study 4: Financial Statements Preparation

The trial balance data enable the preparation of the income statement and balance sheet for Oman Detergents Company. The income statement requires calculating gross profit by subtracting cost of goods sold, which is derived from purchases and opening and closing stock adjustments. Expenses like electricity, salaries, rent, and other operational costs are deducted from gross profit to determine net profit.

In constructing the balance sheet, assets, liabilities, and equity are compiled based on the balances, adjusted for additional information such as stock valuation and accrued expenses. The result presents a snapshot of the company’s financial position at year-end, assisting management and stakeholders in assessing financial robustness and liquidity.

Case Study 5: Cash Conversion Cycle and Performance Evaluation

The cash conversion cycle (CCC) measures the efficiency of working capital management by calculating the time lag between outlay of cash for purchases and receipt of cash from sales. For 2019, this involves calculating inventory days, receivables days, and payables days based on sales, expenses, and stock data.

Comparing the CCC for 2018 and 2019 allows evaluation of improvements in operational efficiency. A shorter CCC indicates faster cash turnaround, better liquidity management, and higher operational efficiency. Conversely, a longer cycle might highlight issues in collection or inventory management, increasing liquidity risk.

Such analysis informs strategic decisions to optimize working capital, enhance cash flow, and sustain profitability in changing market conditions.

Case Study 6: Working Capital Needs and Financing Sources

Marah Entertainment LLC requires sufficient working capital to manage upfront advance payments and ongoing operational expenses. The working capital needs primarily include funds for paying suppliers, event coordination costs, and maintaining daily cash flows, which are typical for event management businesses with high upfront deposits and variable expenses (Sharma & Kumar, 2019).

The advance payments reduce the working capital requirement, but there remain expenses to be financed before receipts. Other factors influencing working capital include the reliability and timing of client payments, seasonality of events, and credit policies.

The suitable sources of working capital finance include bank overdrafts, trade credit, or short-term bank loans, which offer flexibility and quick access aligned with business cash flow cycles. Factoring receivables might also be considered for immediate funds, leveraging receivables as collateral (García-Teruel & Martínez-Solano, 2010).

Case Study 7: Capital Expenditure Analysis and Investment Decision

The Projects A, B, C, and D each require an investment of OMR 52,000, with expected cash flows over eight years. Calculating the payback period for each involves summing annual cash inflows until recoupment of initial investment. Based on these calculations, the project with the shortest payback period is preferred.

Usually, the project that recovers the investment fastest minimizes risk and enhances liquidity. However, other factors such as cash flow stability and strategic fit should also influence the final decision.

The disadvantages of the Payback Period method include ignoring cash flows beyond the payback, not considering the time value of money, and potential bias toward short-term projects, which might overlook long-term profitability. Compared to Net Present Value (NPV) and Internal Rate of Return (IRR) methods, it is less comprehensive in evaluating overall value creation (Brealey et al., 2011).

Case Study 8: Investment Appraisal Using NPV and IRR

Calculating the NPV for each project involves discounting future cash flows at 11%, subtracting initial investments. The project with the highest positive NPV is most suitable for investment, reflecting optimal value addition.

The differences between NPV and IRR include that NPV provides an absolute value in currency terms, while IRR gives a percentage return; NPV is preferred when comparing mutually exclusive projects. NPV considers the cost of capital explicitly and provides clearer decision criteria.

Evaluating the projects, the project with a positive NPV and the highest value aligns with strategic financial goals, ensuring value maximization for Zaika Bakery.

Case Study 9: Investment Appraisal - ARR and IRR

The project’s average accounting return (ARR) is calculated by dividing average annual profit after tax by initial investment. The annual sales grow by 10%, variable costs increase by 8%, and depreciation decreases by 20% each year. Calculating annual profits and then ARR provides insights into profitability relative to capital deployed.

ARR differs from IRR as it does not account for the time value of money; IRR measures the discount rate where NPV equals zero, providing a rate of return.

While ARR is simple and easy to compute, IRR offers a more comprehensive valuation by considering cash flow timings, making IRR more appropriate for capital budgeting decisions (Ross et al., 2019).

Case Study 10: Financing Strategies for Ms. Shamsa’s Business

Ms. Shamsa, faced with substantial capital requirements for modernization, should consider equity finance due to the bullish stock market, which offers opportunities for funding through share issuance. Equity financing reduces debt burden and aligns with her expansion plans (Brealey et al., 2011).

Other factors include the cost of capital, dilution of ownership, and the company’s growth prospects. She should also evaluate alternative sources like bank loans or hybrid instruments depending on interest rates, repayment terms, and financial stability.

In making this decision, her consideration should include the impact on cash flows, financial leverage, and the company’s strategic positioning to ensure sustainable growth (Gitman & Zutter, 2012).

References

• Al-Tamimi, H. A. H., & Ewi, O. A. (2017). Financial market development and economic growth in Oman. Journal of Asian Business Strategy, 7(2), 52–59.
• Brealey, R. A., Myers, S. C., & Allen, F. (2011). Principles of Corporate Finance. 10th ed. McGraw-Hill Education.
• García-Teruel, P. J., & Martínez-Solano, P. (2010). Trade receivables management: Determinants and effects on firms’ performance. European Journal of Managerial Science, 36(3), 312–329.
• Gitman, L. J., & Zutter, C. J. (2012). Principles of Managerial Finance. 13th ed. Pearson.
• Khan, M. A., et al. (2018). Banking and financial markets in Oman. Oman Journal of Finance and Banking, 5(1), 34–45.
• Muttakin, M. B., & Akhtar, S. (2017). Corporate governance and financial performance: Empirical evidence from Pakistani banks. Managerial Finance, 43(9), 1085–1104.
• Ross, S. A., Westerfield, R. W., & Jaffe, J. (2019). Corporate Finance. 12th ed. McGraw-Hill Education.
• Sharma, S., & Kumar, S. (2019). Working capital management and firm performance: Evidence from Indian manufacturing companies. International Journal of Productivity and Performance Management, 68(8), 1633–1654.